Europe EPS producers aiming to raise prices in July

LONDON (ICIS)--European expandable polystyrene (EPS) producers are aiming to raise prices in July, with two suppliers on Friday saying they were considering increments of up to €20/tonne (€26/tonne).

However, the approach of sellers appears to be rather tentative and they acknowledge uncertainty about what will happen to EPS values.

The minor reduction of €4/tonne in the styrene monomer barge contract failed to give the market much direction from the point of view of upstream raw material costs, and one supplier commented that there was "still a bit of a mist" concerning the short-term prospect for prices.

Another said the "major part" of its accounts were not yet settled and "the real deal-making will start next week", although they would strive for a price increase. The producer added: "EPS margins are squeezed. In order to return them to a healthy level we need to push for a price rise. Overall, it will depend on demand."

Demand is usually at or near its strongest at this time of year but volumes so far in 2013 have disappointed. One producer said sales up to the end of May appeared to be around 8-10% lower than in the same period last year.

A buyer said: "Increases aren't in the picture." It had already settled with one supplier at a rollover, although the supplier's initial proposal had been an increase of €20/tonne. It was still negotiating with another supplier, in the hope of obtaining a small reduction.